Why Sibanye-Stillwater is adding both EV and gold projects
(Kitco News) - The world's largest primary platinum producer is jockeying for a position in the energy transition space.
Sibanye-Stillwater's CEO Neal Froneman recently spoke with Kitco News.
Froneman made a counter-cyclical bet into the platinum group metal space last decade, which paid off handsomely. Palladium was one of the top-performing metals of the last decade due to high demand from automakers, which needed beefed up catalytic converters. Rhodium also performed strongly, a key metal in nitrous oxide control.
The company (JSE:SSW) is now weighing opportunities in the electric vehicle space.
Last month the company made a lithium acquisition, a 40 million euro bid for a 30% stake in a Finnish company, Keliber Oy. The company holds several advanced lithium deposits in Finland. The company plans to produce about 15,000 tonnes of lithium hydroxide each year upon the start of production. The company will start building its mine in 2022.
Froneman said the acquisition flows naturally from the company's platinum group metal focus. Although Froneman said PGMs are proving to be essential for hydrogen production, change is ahead.
"I believe there's a strong underpinning until about 2027 when some of these new technologies could well displace palladium. We believe in having a suite of green metals," said Froneman.
When considering what EV projects to acquire, Froneman said location was key.
"There's a number of things that come into making decisions around exposure to lithium. There are shelf-life issues—so you've got to be closer to the market. And it's not only shelf life...lithium is hazardous when it is mixed with water. So you have to be careful. Having a lithium operation close to the market is beneficial in many ways," said Froneman.
The South Africa miner also sees a need for gold.
"You would probably ask, 'why gold?' Gold is countercyclical to industrial metals. It gives us that natural hedge in terms of being able to pay industry-leading dividends in a sustainable way," said Froneman.